Gore Claims Cap-and-Trade Will Save Americans Money

April 27, 2009 - 6:37 PM
The former vice president and Nobel prize winner claims that "cap-and-trade" legislation will eventually save Americans money by reducing the amount of energy they consume. 

Former Vice President Al Gore testifies on Capitol Hill in Washington, Friday, April 24, 2009, before the House Energy and Environment subcommittee. (AP Photo/Manuel Balce Ceneta)

(CNSNews.com) -- Former Vice-President Al Gore told Congress last week that that the provisions of “cap-and-trade” legislation will eventually save Americans money by reducing the amount of energy they buy.

Gore appeared last Friday before the House Committee on Energy and Commerce’s subcommittee on energy and environment, the panel that crafted the 646-page American Clean Energy and Security Act of 2009.
 
The bill aims at reducing greenhouse gas emissions 80 percent by mid-century, through energy efficiency measures and a cap-and-trade proposal that requires energy companies to buy licenses from the government in order to emit carbon while producing electricity.  The idea of the legislation is to drive Americans away from buying electricity produced with carbon emissions by artificially raising the price of electricity produced that way.

Over time, under the theory of the bill, the government would subsidize the creation of new "green" electricity producing industries and people would buy them because their prices were subsidized by the government while traditional electricity had prices artifcially inflated by the government.
 
Gore’s assessment that families would save money under cap-and-trade because they would buy less energy came during questioning by a committee member, Rep. G.K. Butterfield (D-N.C). Butterfield asked the former vice president how he would explain to Butterfield’s constituents the cost expected to be covered by taxpayers for the transition to alternative energy.

Butterfield described his constituents as being “fourth from the bottom” on the scale in terms of median income in the U.S. 
 
Al Gore, former vice president: I think that the provisions of this bill can lead to a reduction in cost for that family --
 
Rep. G.K. Butterfield, (D-N.C.) (interrupting): -- Not immediate, not immediate reductions --
 
Al Gore, former vice president: -- Well, it depends on how quickly they’re implementing, how they’re taking advantage of it.
 
According to Gore, the transition to a cap-and-trade system would cost families 30 cents per day.
 
“The latest . . . estimate of the cost of the transition is about 30 cents per day,” he said. “And that wasn’t even taking into account the savings that same household paying that 30 cents per day can make if they take advantage of the other provisions that would allow them to insulate and change out the windows and light and have sharp decreases in their energy consumption.”
 
But Rep. Greg Walden (R-Ore.), a member of the committee, pointed out that Gore’s estimate is based on an Environmental Protection Agency (EPA) study that assumes nuclear power will play a much larger role in America’s energy future.
 
“The EPA study assumes 150 percent total nuclear power in order to achieve that 30 cents per day,” Walden said.
 
He also pointed out that the amount of nuclear power that the EPA study suggests will be needed is not included in the cap-and-trade bill. 

Meanwhile, retired Sen. John Warner (R-Va.), who testified alongside Gore in support of the bill, told CNSNews.com that the transition to clean energy would be a “burden” and it will “take time.”
 
“The duty we have is to be honest with them (the American people), tell them it’s going to be a burden and tell them it’s going to take time,” he said.
 
“That’s (the transition to clean energy) going to take big bucks and a lot of time,” he added.
 
Warner told CNSNews.com: “Just the carbon cap legislation alone will raise electricity prices 25 to 50 percent.”
 
Rep. Joe Barton (R-Texas), ranking member of the House Committee on Energy and Commerce, agreed the increase would be substaintial, telling CNSNews.com, “There is no analysis of a cap-and-trade proposal that says (energy) costs aren’t going to go up.”
 
He added: “Chairman Waxman, Markey, and others say ‘Sure, costs are going to go up, but we are going to reallocate (funds),’” Barton said. “Anytime you send money through Washington some of it sticks here.”
 
Under the provisions of the cap-and-trade bill, limits on carbon emissions would be be set by the government and businesses would have to purchase permits to emit carbon dioxide and other greenhouse gases. Companies that use less than their permit allows could sell the excess to businesses that exceed the limit.   

Rep. Henry Waxman (D-Calif.), meanwhile, avoided answering CNSNews.com’s question of whether cap-and-trade would drive up energy prices.
 
“I think the cap-and-trade program will produce new technology so that we can reduce our consumption of fossil fuels and it will also incentivize a greater efficiency that will lead to whole bunch of strategies to become dependent in the United States,” he told CNSNews.com.
 
When CNSNews.com followed up with, “Will it increase prices?” Waxman responded only by saying -- “I’ve got to go.”  
 
Former House Speaker Newt Gingrich, meanwhile, who testified against the cap-and-trade bill, said it is possible that the jump in energy prices under a cap-and-trade proposal “might” drive people to alternative energy.
 
“It depends whether or not they go broke in the process,” Gingrich added.

An EPA analysis of the bill, released April 20, stated: “A cap-and-trade policy increases the price of energy-intensive goods. The majority of this price increase is ultimately passed onto consumers.”
 
House Democrats introduced the climate-adjustment legislation, known officially as the American Clean Energy and Security Act of 2009, on Mar. 31.